Just purchased an occupied triplex in Indianapolis, IN. One of the tenants is not going to renew her lease at the start of the month and as such, has not signed any paperwork with me. The former owner/landlord has not transferred me her security deposit and is the one she has the lease with.
In Indiana, if she moves out on the 1st as she says, am I still required to give her a security deposit back? Even though I never received one from the former landlord/owner.
Property Manager · Indianapolis, IN · Member since 2012 · 205 posts · 157 votes
6y
If you are owner at move out you are responsible. Unless prior manager will be your manager Security Deposit should always be transferred on closing statements
Property Manager · Indianapolis, IN · Member since 2012 · 205 posts · 157 votes
6y
If you are owner at move out you are responsible. Unless prior manager will be your manager Security Deposit should always be transferred on closing statements
If you are owner at move out you are responsible. Unless prior manager will be your manager Security Deposit should always be transferred on closing statements
Yes- always have security deposits transferred on the settlement statement. This insures you get it and gives you a paper trail when the tenants magically increase the security deposit. Even if the management company is the same, transfer it on the settlement statement because of the paper trail and there's no guarantee the management company will credit you. I'd also encourage investors buying occupied properties to have the seller and current tenant complete an estoppel letter. This puts in writing the rent amount, SD amount, who owns what appliances, who's paying what utilities and anything else you find helpful to know.
@Harvey Levin The former owner refused to transfer security deposits as it wasn't expressly written in the contract. I found the following:
Even after the sale, the landlord is still responsible for the proper return of all tenants’ security deposits for one year after the sale unless:
He or she transfers the security deposits to the new owner. The new owner must then notify the tenants that he or she is now the owner and is in possession of their security deposits.
@Aaron Signer If you are the owner at the time, then yes. However, move out is the last day of the month-not the 1st. You could try telling her that she needs to get the deposit from him, but it sounds like he wouldn't return it.
Hindsight is great, but you should have specified deposits and prorated rent in the contract.
@Theresa Harris Hindsight absolutely is 20/20 on this learning lesson. Thanks; fingers crossed she reaches out to him.
We all learn as we go, hopefully looking at what others did to make fewer mistakes of our own. If you want to look at the positive-the unit will be empty, you can get it into good shape and probably get more rent and recoup that money for the deposit through the higher rent.
Property Manager · Griffith, IN · Member since 2015 · 1k+ posts · 913 votes
6y
@Aaron Signer based on that law you found- I'd show the tenant the settlement statement to show you didn't get it and they can get it from the previous owner. He's the one responsible. At the end of the day, it does make it hard on you to keep any back for damages they may have caused.